Follow-up
Today's market move in my opinion is the start of many to come, given the following: 1) Product diversification: Luc's decision to focus on free cash flow over the past 2 years has resulted in their ability to engage a partner with another drug within the same indication. Adding this product diversification will now allow the market to give EGRIFTA a much stronger valuation and at the same time, give TaiMed an opportunity to enter North America with an existing Salesforce who is committed to marketing a niche product; one that will save lives. 2) Fit: TaiMed made the appropriate choice in partnering with Thera. Theratechnologies has an excellent management team; and if you have taken the time to attend an AGM, you will likely agree that the entire team is a class act. Thera has been through challenging times in the past and has learned from their own experience in working with a major partner. Thera has successfully communicated this with TaiMed, and this experience will be of most benefit to TaiMed's Ibalizumab. 3) Valuation: In my opinion, the market will now begin to give credibility to Thera and at the same time recognize that other HIV products could also be added to their pipeline, benefiting both EGRIFTA and Ibalizumab. Thera will earn between $10M and $12M in EBITDA, which is effectively pure Net Income because they are paying no tax on the next $300M of earnings because of tax loss carry-forward - essentially allowing them to give TaiMed even better terms. 4) Opportunity: This is the first step towards being able to invest in their next portfolio of products; whether it be COPD or other areas where Tesamorelin is effective. This time however, the company is fortunate to have a CEO who understands that the valuation of a company is the discounting of future earnings. This shareholder friendly mentality will encourage both new long-term shareholders, and new partners like TaiMed. I am a long-term shareholder of Theratechnologies, and I congratulate the financial discipline that TH has maintained in order to provide all stakeholders with a return or potential return on their investment; of course only time and proper execution will allow the latter to materialize. Also, well done TaiMed, you have a class-act of a partner that is interested in a mutually beneficial long-term relationship. GLTA.